CN 1 October 1, 2006
CANCELLATION/NULLIFICATION
Flood insurance coverage may be terminated at
any time, by either canceling or nullifying the policy
depending upon the reason for the transaction. If
coverage is terminated, the insured may be entitled
to a full or partial refund under applicable rules and
regulations. In some instances, the insured might
be ineligible for a refund.
I. PROCEDURES AND VALID REASONS
Submit a completed Cancellation/Nullification
Request Form and proper documentation to the
current NFIP insurer for processing.
A. Refund Processing Procedures
1. The current NFIP insurer (WYO Company
or Direct Business) will be responsible for
returning the premium for the current and 1
prior policy year, provided that it was the
insurer for that period. If another NFIP
insurer was the insurer for the prior policy
year, it will be responsible for returning the
premium for that year.
2. Requests for refunds for more than 2 years
(Reason Codes 4, 6, 10, 16, and 22 only)
must be processed by the NFIP Bureau.
a. For requests processed by the Bureau,
the current NFIP insurer must submit all
of the documentation necessary to
make a refund for any period exceeding
2 years. At a minimum, this docu-
mentation will consist of the following:
• A policy cancellation request and
the premium refund calculation for
each year.
• The company’s statistical records or
declarations pages for each policy
term and evidence of premium pay-
ments obtained from the insured if
these documents are not available
from the company’s records.
• Photographs to verify ineligible risks.
• For Cancellation Reason Code 22
only (standard policy eligible for PRP):
A Letter of Map Amendment (LOMA);
a Letter of Map Revision (LOMR); a
copy of the most recent flood map
marked to show the exact location
and flood zone of the building; a letter
indicating the exact location and flood
zone of the building, and signed and
dated by a local community official; an
Elevation Certificate indicating the
exact location and flood zone of the
building, and signed and dated by a
surveyor, engineer, architect, or local
community official; or a flood zone
determination certification that guar-
antees the accuracy of the
information.
b. Mail the appropriate documentation to the
NFIP Bureau and Statistical Agent,
Under-writing Department, P.O. Box 310,
Lanham, MD 20703.
3. WYO Companies will be notified of the
premium refunded and the Expense
Allowance due to the NFIP. The companies
must maintain this documentation as part of
their underwriting files.
4. The insured must have a current NFIP policy
to be eligible for a refund of any prior year’s
premium. All existing refund rules concerning
the Federal Policy Fee and producer
commission remain in effect.
TRRP reason codes in this section are used for
reporting purposes only.
B. Reason Codes for Cancellation/
Nullification of NFIP Policies
1. Building Sold or Removed. (TRRP
reason 01)
The insured has sold or transferred
ownership of the insured property and no
longer has an insurable interest; the builder
or developer has requested to cancel the
policy mid-term because a newly created
association has purchased a policy under
its name; or the insured property has been
removed from the described location. This
reason code also may be used if the
building has been foreclosed or if the
building is considered a total loss because
the building damage is greater than or
equal to the replacement cost of the
building. The effective date of the
cancellation is the date the insured ceased
to have an insurable interest in the
property. For buildings sold, proof-of-sale
documentation is required.
y Type of Refund: Pro Rata
y Years Eligible for Refund: Up to 2 years
y Cancellation Request: Must be received
within 1 year of date of sale or removal
y Documentation: Bill of sale, settlement
statement, foreclosure notice, proof of
removal, or proof of total loss
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CN 2 May 1, 2005
2. Contents Sold or Removed. (TRRP
reason 02)
The insured has sold or transferred
ownership of the insured property and no
longer has an insurable interest, or the
insured property has been completely
removed from the described location. The
effective date of the cancellation is the date
the insured ceased to have an insurable
interest in the property at the described
location, or the date the property was
removed from the described location.
y Type of Refund: Pro Rata
y Years Eligible for Refund: Up to 2 years
y Cancellation Request: Must be received
within 1 year of date of sale or removal
y Documentation: Bill of sale, proof of
contents removal, or proof of total loss
3. Policy Canceled and Rewritten To
Establish a Common Expiration Date
with Other Insurance Coverage. (TRRP
reason 03)
The new policy must be rewritten within the
same company for the same or higher
amounts of coverage. However, if it is
rewritten for higher amounts of coverage,
the waiting period rule will apply. The
producer must submit a new Application
and premium. Upon receipt of the new
policy declarations page, the producer
should request cancellation of the prior
policy. The effective date of the cancellation
will be the same as the effective date of the
new policy.
y Type of Refund: Pro Rata
y Years Eligible for Refund: Current year
y Cancellation Request: Must be received
within 1 year of the new policy effective
date
y Documentation: Copy of new policy
declarations page
4. Duplicate NFIP Policies. (TRRP reason
04)
When a duplicate NFIP policy has been
issued, only one policy can remain in effect.
The insured can choose which policy is to
remain in effect and which policy is to be
canceled. This does not apply when there
has been a deliberate creation of duplicate
policies. If this event does occur, the policy
with the later effective date must be
canceled. Losses occurring under such
circumstances will be adjusted according to
the terms and conditions of the first policy.
When coverage has been force-placed by
a lender using a conventionally written
standard policy because the required
underwriting information is available, that
policy is considered equivalent to the
MPPP policy. The WYO Company is
authorized to cancel the standard (force-
placed) or the MPPP policy, provided that
a copy of the force-placement letter from
the mortgagee and a copy of the policy
declarations page are submitted with the
Cancellation/Nullification Request Form.
y Type of Refund: Pro Rata
y Years Eligible for Refund: Up to 6 years
y Cancellation Request: Must be received
within 1 year of the policy expiration
date
y Documentation: Copy of declaration
page(s) and, for the MPPP, a copy of
the force-placement letter from the
mortgagee
5. Non-Payment. (TRRP reason 05)
When a producer accepts a premium
payment from a client and then submits an
agency check to the NFIP with the
application, the policy may be nullified if the
client's check is returned because of
insufficient funds or any other reason the
check is not made good to the producer.
The bank's notice must be attached to the
form when this situation occurs. If the
producer can document this, a full premium
refund is provided to the producer. If a
WYO company has covered the premium
for a prospective insured and then does not
receive payment, the policy can be nullified.
This reason cannot be used if the producer
advanced agency funds and the client
simply refused to pay the agency.
y Type of Refund: Full
CN 3 May 1, 2005
y Years Eligible for Refund: Current year
y Cancellation Request: Must be received
during the policy year
y Documentation: Bank notice of non-
payment
6. Risk Not Eligible for Coverage. (TRRP
reason 06)
This reason is used to nullify a policy when
an application was submitted and a policy
issued on a property not eligible for
coverage. A clear and precise explanation
must be included when submitting this type
of cancellation request. Examples include:
- Property not located in a community
participating in the NFIP. (The use of an
incorrect community number allowed the
policy to be issued.)
- Contents located in an open building.
- Property is located in a Coastal Barrier
Resources System (CBRS) area.
y Type of Refund: Full
y Years Eligible for Refund: No limit, back
to policy inception
y Cancellation Request: Must be received
within 1 year of the policy expiration date
y Documentation: Tax records, Section
1316 declaration, or CBRA determi-
nation, as appropriate, or photographs
showing ineligibility
7. Property Closing Did Not Occur. (TRRP
reason 08)
This reason is used to nullify a policy when
a policy is issued for a closing at the time of
settlement on a property and the transfer of
the property does not take place. The client
does not actually acquire an insurable
interest in the property.
y Type of Refund: Full
y Years Eligible for Refund: Current year
y Cancellation Request: Must be received
during the policy year
y Documentation: Statement from title
company, lender, or attorney
representing the interests of title
company, lender, or insured, that the
property closing did not occur
8. Policy Not Required by Mortgagee.
(TRRP reason 50)
This provides a means to cancel a policy
when coverage was required by the
mortgagee for a closing and it was later
determined that the property was not
located in a Special Flood Hazard Area
(SFHA). As a result, coverage was not
required by the mortgagee. The
mortgagee’s statement to this effect must
be attached to the Cancellation/Nullification
Request Form.
This cancellation reason can be used only if
the cancellation request was made during
the initial policy term. The cancellation
effective date is the date the cancellation
request is received by the writing company.
A revised determination from the lender
may be used to cancel the policy. A FEMA
Out-As-Shown Determination, as a result of
a LOMA application, is needed if there is a
discrepancy between the lender’s and the
insured’s determinations.
NOTE: This cancellation reason may be
used even if the policy was written as being
in a non-SFHA.
y Type of Refund: Pro Rata
y Years Eligible for Refund: Current year
y Cancellation Request: Must be received
during the policy year
y Documentation: Copy of original
mandatory purchase document and
current mortgagee statement that policy
is not required; a revised determination
from the lender showing that the
building is not in an SFHA.
9. Insurance No Longer Required by
Mortgagee Because Property Is No
Longer Located in a Special Flood
Hazard Area Because of a Physical Map
Revision. (TRRP reason 09)
Flood insurance was initially required by the
mortgagee or other lender because the
property was determined to be in an SFHA.
Following the physical revision of a map, if
the property is no longer located in an
SFHA, then the policy may be canceled
CN 4 October 1, 2005
provided the mortgagee confirms in writing
that the insurance is no longer required
because the property was removed from
the SFHA.
NOTE: RCBAP policies require a release
from the mortgagee of every unit owner in
the association or a statement of the unit
owner, if no mortgagee. Only after this
requirement is met can the policy be
canceled. The condominium association
must provide a signed letter that lists the
number of units and specifies the owner of
each unit.
y Type of Refund: Full
y Years Eligible for Refund: Current year
and for an additional policy year in
those cases where the insured had
been required to renew the policy
during the 6-month period when a
revised map was being reprinted,
provided no claim has been paid or is
pending during the policy year that is
being canceled
y Cancellation Request: Must be received
during the policy year or within 6
months of the policy expiration date
y Documentation: Statement from mort-
gagee that insurance was required as
part of mortgage but is no longer
required, and a copy of the revised map
10. Condominium Policy (Unit or
Association) Converting to RCBAP.
(TRRP reason 45)
This provides a means to cancel a
condominium policy because coverage is
being provided under an RCBAP. Duplicate
coverage occurs when the unit owner policy
and the RCBAP limits are more than the
cost of the unit, up to the maximum limits of
the Program.
y Type of Refund: A pro rata premium
refund, including Federal Policy Fee
and Probation Surcharge, is provided.
y Years Eligible for Refund: Up to 6 years
y Cancellation Request: Must be received
within 1 year of the policy expiration
date
y Documentation: Copy of RCBAP and
value of unit
12. Mortgage Paid Off. (TRRP reason 52)
This reason is used to cancel a policy that
was obtained due to a requirement by a
mortgagee or lender as a condition of a
mortgage loan, and that mortgage loan has
now been paid off.
y Type of Refund: Pro Rata
y Years Eligible for Refund: Current year
y Cancellation Request: Must be received
within 6 months of the date the
mortgage was paid off for the
cancellation to be effective on the date
of payoff. When the request is received
after 6 months, the effective date for
cancellation is the receipt date of the
request.
y Documentation: Statement from mort-
gagee that mortgage has been paid off
and that flood insurance was required
as part of mortgage
13. Voidance Prior to Effective Date. (TRRP
reason 60)
This reason is used when coverage is not
mandatory and a policyholder decides
during the 30-day waiting period, or prior to
the effective date of a renewal, not to take
the policy, after submitting a premium
payment.
y Type of Refund: Full
y Years Eligible for Refund: Current year
y Cancellation Request: Must be received
prior to the policy effective date
y Documentation: Policyholder’s request
14. Voidance Due to Credit Card Error.
(TRRP reason 70)
This reason is used when an error or billing
dispute occurs (processing error or fraud)
on a credit card payment.
y Type of Refund: Full
y Years Eligible for Refund: Current year
y Cancellation Request: Must be received
during the policy year
y Documentation: Credit card notice of
non-payment
CN 5 October 1, 2005
15. Insurance No Longer Required Based on
FEMA Review of Lender's Special Flood
Hazard Area Determination. (TRRP
reason 16)
Flood insurance was initially required by the
mortgagee or other lender because the
property was determined to be in a Special
Flood Hazard Area (SFHA). Following a
review under the Flood Disaster Protection
Act of 1973, as amended, FEMA issued a
Letter of Determination Review (LODR)
because the building or manufactured
home is not in an SFHA and insurance is
not required. The policy may be canceled
back to inception.
This cancellation reason can be used only if
the request from the borrower and lender
was sent to FEMA for a LODR within 45
days from the lender’s notification to the
borrower that the building is in an SFHA
and that flood insurance is required.
y Type of Refund: Full
y Years Eligible for Refund: Current year
provided no claim has been paid or is
pending
y Cancellation Request: Must be received
during the policy year or within 6
months of the policy expiration date
y Documentation: Copy of FEMA’s Letter
of Determination Review, and
statement from the lender that flood
insurance is not required
16. Duplicate Policies from Sources Other
Than the NFIP. (TRRP reason 17)
This reason code is used to cancel an NFIP
policy when a duplicate policy has been
obtained from sources other than the NFIP.
y Type of Refund: Pro Rata
y Years Eligible for Refund: Current year
y Cancellation Request: Must be received
within 6 months of the new policy
effective date. When the request is
received after 6 months, the effective
date for cancellation is the receipt date
of the request.
y Documentation: Copy of declarations
page of the new policy and a statement
from the mortgagee, if any, accepting
the non-NFIP policy as the replacement
18. Mortgage Paid Off on a Mortgage
Portfolio Protection Program (MPPP)
Policy. (TRRP reason 52)
This reason code is used to cancel an
MPPP Policy after the mortgage is paid off.
y Type of Refund: Pro Rata
y Years eligible for refund: Current year
• Cancellation Request: Must be received
within 6 months of the date the
mortgage was paid off for the
cancellation to be effective on the date
of payoff. When the request is received
after 6 months, the effective date for
cancellation is the receipt date of the
request.
y Documentation: Statement from mort-
gagee that mortgage has been paid off
and that flood insurance was required
as part of mortgage
19. Insurance No Longer Required by the
Mortgagee Because the Structure Has
Been Removed from the Special Flood
Hazard Area (SFHA) by Means of Letter
of Map Amendment (LOMA) or Letter of
Map Revision (LOMR). (TRRP reason 20)
Where flood insurance was required by the
mortgagee or other lender because the
property was determined to be in an SFHA,
and it is later determined that the property is
no longer located in an SFHA through the
issuance of a LOMA or LOMR, the policy
can be canceled provided the lender
confirms in writing that the insurance is no
longer required because the property was
removed from the SFHA. A copy of the
LOMA or LOMR must accompany this
request.
NOTE: RCBAP policies require a release
from the mortgagee of every unit owner in
the association or a statement of the unit
owner, if no mortgagee. Only after this
requirement is met can the policy be
canceled. The condominium association
must provide a signed letter that lists the
number of units and specifies the owner of
each unit.
• Type of Refund: Full
CN 6 October 1, 2005
• Years Eligible for Refund: Current year
and, if applicable, 1 prior year provided
no claim has been paid or is pending
during the policy year that is being
canceled
• Cancellation Request: Must be received
during the policy year or within 6 months
of the policy expiration date
y Documentation: Statement from mort-
gagee that flood insurance is no longer
required because the property was
removed from the SFHA, and a copy of
the LOMA/LOMR
20. Policy Was Written to the Wrong Facility
(Repetitive Loss Target Group). (TRRP
reason 21)
This reason is used to cancel a policy flat
when coverage was inadvertently written to
the wrong facility on those structures that
were identified as part of the Repetitive
Loss Target Group. The cancellation
effective date must be the same as the
policy effective date.
y Type of Refund: Full
y Years Eligible for Refund: Current year
y Cancellation Request: Must be received
during the policy year
y Documentation: Repetitive Loss Target
Group Report provided by the NFIP
Bureau and Statistical Agent
21. Other: Continuous Lake Flooding or
Closed Basin Lakes. (TRRP reason 10)
This cancellation code is used for
continuous lake flooding or closed basin
lakes. The cancellation can be for only one
term of a policy. The cancellation effective
date must be after the date of loss.
y Type of Refund: No refund allowed
y Years Eligible for Refund: N/A
y Cancellation Request: N/A
y Documentation: FEMA notification
22. Cancel/Rewrite Due to Misrating. (TRRP
reason 22)
This reason code is used when ineligible
PRPs or MPPP policies are canceled and
rewritten and when changes are made due
to system constraints. The code should also
be used to cancel a standard policy that is
eligible for a PRP. Refunds resulting from
the cancellation must be applied to the
rewritten policy prior to any refund being
generated. Use rollover indicator “Z” to
report the new policy.
y Type of Refund: Full
y Years Eligible for Refund: Up to 6 years
y Cancellation Request: N/A
y Documentation: LOMA, LOMR, zone
determination, copy of map, etc.
23. Fraud. (TRRP reason 23)
This reason code is used when fraud has
been determined by FEMA. No premium
refund is allowed with this reason code. The
agent will retain the full commission, and
the company’s expense allowance will not
be reduced.
y Type of Refund: No refund allowed
y Years Eligible for Refund: N/A
y Cancellation Request: N/A
y Documentation: FEMA notification
24. Cancel/Rewrite Due to Map Revision,
LOMA, or LOMR. (TRRP reason 24)
Effective February 1, 2005, this reason
code is used to cancel and rewrite a
standard flood insurance policy to a PRP as
the result of a map revision, LOMA, or
LOMR. The standard policy will be canceled
and rewritten as a PRP as of inception. Use
New/Renewal Indicator ‘Z’ to report the new
policy. Premium from the canceled policy
will be applied to the PRP with the
difference refunded to the policyholder. No
30-day waiting period will apply to the PRP.
The agent will retain the full commission,
and the company’s expense allowance
will not be reduced. This rule applies to
the current policy year and
CN 7 October 1, 2005
one prior year provided that the effective
date of the map revision or LOMA/LOMR
occurred during the prior year.
y Type of Refund: Full
y Years Eligible for Refund: 2
y Cancellation Request: Must be received
during the policy year or within 6
months of the policy expiration date
y Documentation: Copy of revised map,
LOMA, or LOMR.
II. COMPLETING THE CANCELLATION/
NULLIFICATION REQUEST FORM
A. Current Policy Number
In the upper right corner of the form, enter the
NFIP policy number.
B. Policy Term
Enter the policy term and the cancellation
effective date.
C. Agent Information
Enter the complete name, mailing address,
phone number, and fax number of the producer.
D. Insured Mail Address
Enter the complete name, mailing address, and
phone number of the insured. If the insured has
moved to a new location, enter the new mailing
address.
E. First Mortgagee
Enter the complete name, mailing address,
phone number, and fax number of the first
mortgagee.
F. Other Parties Notified
Enter the complete name and mailing address of
all other interested parties who are to be notified,
such as any additional insured, the second
mortgagee, the loss payee, trustee, or disaster
assistance agency.
G. Property Location
Enter the location of the insured property.
H. Cancellation Reason Code
Check the reason for cancellation of the policy
and provide any additional information required.
I. Refund
Check the appropriate box to indicate to whom
the refund is to be made payable.
When a Cancellation/Nullification Request Form
is received that directs the NFIP to make a
premium refund to the PAYOR and the policy
has been endorsed showing the PAYOR as a
WYO Company or agency, the NFIP will make
the refund payable to the insured and mail the
refund in care of the producer. Check the
appropriate box to indicate to whom the refund
should be mailed.
J. Signature
The insured must sign and date the
Cancellation/Nullification Request Form for all
cancellation reason codes except 5 and 6. The
producer must sign, date, and enter a Tax I.D.
Number or Social Security Number in every
case. After completing the form, attach all
required supporting documents and mail the
original to the NFIP.
The producer should retain the second copy,
give the third copy to the insured, and the fourth
copy to the mortgagee.
After processing the Cancellation/Nullification
Request Form, the NFIP will send the producer,
mortgagee, and insured a notice of cancellation.
Processing Outcomes for Cancellation/Nullification
of a Flood Insurance Policy
PREMIUM REFUND
FEDERAL POLICY FEE
AND PROBATION SURCHARGE
PRODUCER COMMISSION
(Direct Business Only)
Reason Code for
Cancellation/
Nullification
(with TRRP Code)
Full Pro Rata Full Refund Pro Rata Fully
Earned
Full
Deduction
Pro Rata Retained
1
(
01
)
9 9
9
2
(
02
)
9 9
9
3
(
03
)
9 9
9
4
(
04
)
9 9
9
5
(
05
)
9 9
9
6
(
06
)
9 9
9
7
(
08
)
9 9
9
8
(
50
)
9 9
9
9
(
09
)
9 9
9
10
(
45
)
9 9
9
12
(
52
)
9 9
9
13
(
60
)
9 9
9
14
(
70
)
9 9
9
15
(
16
)
9 9
9
16
(
17
)
9 9
9
18
(
52
)
9 9
9
19
(
20
)
9 9
9
20
(
21
)
9 9
9
21
(
10
)
NO REFUND ALLOWED
9 9
22
(
22
)
9 9
9
23
(
23
)
NO REFUND ALLOWED
9 9
24
(
24
)
9 9
9
CN 8 October 1, 2005
CN 9 October 1, 2006
CN 10 October 1, 2006
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